Graphite India gains on reporting turnaround Q1 results

Revenue from operations declined 2.54% year on year (YoY) to Rs 728 crore in the quarter ended June 2024.

The firm reported a profit before tax of Rs 284 crore in first quarter of FY25 as compared with pre-tax loss of Rs 37 crore posted in same quarter last year.

For Q1, EBITDA stood at Rs 307 crore as against EBITDA loss of Rs 13 crore posted in Q1 FY24. EBITDA margin was at 42.2% in June 2024 quarter as compared to negative EBITDA margin of 1.7% recorded in the similar period a year ago.

K K Bangur, chairman of Graphite India, said, “In Q1 FY25, Graphite India registered consolidated net sales of Rs 728 crore, a marginal decline of 2.5% compared to Q1 FY24. Net sales was driven by higher volumes offset by lower realisations. The company delivered EBITDA of Rs 307 crore, which includes other income of Rs 194 crore, and net profit of Rs 236 crore. Capacity utilization increased to 87% as compared to 67% in Q1 FY24. Graphite India continues to be well capitalised with a net cash balance of Rs 3,729 crore at the end of 30 June 2024.

During the quarter, global crude steel production excluding China increased by 1.8% on YoY and a decline of 0.3% on QoQ. Except for India and Middle East which increased production by 10.6% and 12.5% respectively, all other major countries either recorded marginally increased or declined steel production. The increase in India’s steel production was correlated to the government spending on the infrastructure and construction sectors. Both these sectors are expected to jointly account for 67% of India’s steel demand until 2030.

While the pricing for graphite electrodes continues to remain under pressure, the decline in the cost of imported needle coke is not commensurate, thereby impacting operating margins.

Graphite India is the largest Indian producer of graphite electrodes and one of the largest globally, by total capacity. Its manufacturing capacity of 98,000 tonnes per annum is spread over three plants at Durgapur and Nashik in India and Nurnberg in Germany. It manufactures the full range of graphite electrodes but stays focused on the higher margin, large diameter, ultra-high power (UHP) electrodes.